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Built in a dirty boom, China's biggest city tries to go green

Coco Liu, E&E Asia correspondent

ClimateWire: Monday, September 26, 2011

CHONGQING, China -- Wandering around in downtown Chongqing, it is hard to imagine that this is a city that is going green.

Vehicles clog roads in every direction. Construction cranes stretch to the horizon. And huge posters displaying locally produced industrial goods show where the city's exploding economic growth is coming from.

But Chongqing (population 28,846,200) is more than meets the eye. After living with acid rain and toxic smog for decades, the city has been scrambling for ways to clean up the air. It is also overhauling its power-hungry economy and rebuilding it on a base of industries that use less energy.

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Chongqing isn't alone on such a transformation path. It is one of several pilot provinces and cities that Chinese leaders picked last year in an attempt to find a low-carbon growth model that can be spread to the rest of the nation.

Experts attribute this new Chinese desire to the fact that China's environment and natural resources can no longer afford the blights of heavily polluting, energy-intensive growth. Moreover, there is growing pressure from the outside world to reduce emissions.

Cities will play a major role in that effort. During the next 20 years, more than half of global greenhouse gas emissions are estimated to come from the developing world's cities, and more than half of that will come from Chinese cities, says Michael Lindfield, a lead urban development specialist at the Asian Development Bank.

"So the importance of making Chinese cities energy-efficient is really a global issue, not just a Chinese issue," Lindfield added.

But none of this comes easily. For one, it is hard for cities to uproot decades-old economic foundations. In addition, cities risk revenue losses. Energy-guzzling factories that are shut down, in many cases, can't be immediately offset by low-carbon industries that are still in their nascent stage. Moreover, the switch from traditional industries to green businesses claims jobs, at least for a short term. While cement makers can hire people with few skills, solar panel producers can't.

The goal for Chongqing, which is nestled in the mountains of less-developed western China, may be the most ambitious of them all. One expert even puts it in this way:

"If Chongqing can succeed in transforming into a green, low-carbon city, there is no doubt that the rest of Chinese cities will be able to make this switch," said Li Yong, an economist at Chongqing Academy of Social Sciences, a leading think tank in western China.

The dark side of a manufacturing tradition

Chongqing's challenge is deeply rooted in its past. Back in the late 1930s, the city was the wartime capital of China. Thousands of factories moved from Japanese-occupied eastern regions to inland Chongqing, quickly turning it into an industrial city. Factories multiplied again in the 1960s. As a war with the former Soviet Union was thought to be a likely scenario at that time, Chongqing was turned into a manufacturing base to provide weapons, vehicles and many other industrial goods that could be used against the enemy.

While the enemy never came, Chongqing did become one of the nation's industrial hubs. It is China's biggest producer of motorcycles. It leads in aluminum production. Every day, containers of made-in-Chongqing steel, chemicals and machinery are loaded on cargo ships and then sent from here to destinations along the Yangtze River.

All this came at a heavy price. Data from the World Bank showed that in the early 2000s, one-third of crops in the Chongqing area had been damaged by acid rain -- the result of sulfur dioxide and other industrial pollutants.

Breathing here became a dangerous thing to do. The World Bank reported that in 2004, residents in Chongqing were inhaling six times more lung cancer-causing pollutants than the World Health Organization considers safe.

"The city was always enveloped by fog and smog," explained Li, the local economist. The mountain terrain around it helped concentrate Chongqing's murky air, he said, "but pollution from heavy industries was the key."

No more need to wash umbrellas

To clean its skies, in recent years, Chongqing first changed the fuel of its taxis, replacing their gasoline tanks with natural gas. Meanwhile, light rail was set to run up and down its hilly streets, luring private car drivers into mass transit. Heavy industries -- all of them major polluters -- were ordered to relocate to the outskirts in industrial parks with tighter environmental controls.

The policy was so stringent that one of the city's biggest taxpayers found it was not exempt. It took nearly $4 billion plus five years to get Chongqing Iron & Steel Group to move.

The move still isn't completed, but Chongqing Iron & Steel's old factory site, usually wrapped wrapped in a shroud of gray smog, is slated to become the site of riverview apartments and pollution-free software companies. There will also be an art area, featuring the plant's giant chimneys as a reminder of the city's gritty past.

At the same time, the new factory is also much cleaner. Armed with the cash and encouraging policy from the central and municipal governments, the steel mill modernized its decades-old production lines. That cut more than half of the dust and sulfur dioxide the mill emits. Meanwhile, its steel output has doubled.

The smog-shrouded skyline of Chongqing, the biggest player in China's efforts to enlist cities to fight climate change. Photo by Coco Liu.

This, together with many other pollution-shrinking measures, brought more sunny days to the city. It also changed citizens' habits during the rainy season.

"When I had my college time in Chongqing 20 years ago, my umbrella got spoiled very quickly because of acid rain," recalled Jin Ruidong. To protect his umbrella, Jin said, he learned to wash it after each time it was used, and so did his classmates.

"But now, I can bring back a clean umbrella without any washing no matter how long I use it," Jin said. "The air quality of Chongqing is greatly improved."

Farmers embrace cap and trade

The former college student, who works for the Beijing office of the U.S.-based Natural Resources Defense Council, often travels to Chongqing and helps the city improve its energy efficiency. Since Chinese cities largely run on coal, a high carbon dioxide emitter, more efficient energy use means slowing down global warming.

Chongqing leads the nation in reducing the amount of the energy that its buildings consume, Jin says. Now, it is developing a cap-and-trade scheme to get factories on its side of the energy-saving battle.

Under such scheme, factories that emit carbon dioxide beyond a set limit will be required to buy allowances, while those that become more efficient can sell allowances they no longer need.

Besides trading allowances with one another, factories will also have other options to comply. Their choices will include sponsoring tree planting or paying area farmers to turn waste into biogas power.

"The central government quite supports this idea," explained Chen Hongbo, a carbon trading expert who oversees the proposed citywide scheme. "That is because it not only helps the city reduce carbon emissions but also promotes a sustainable development in rural areas."

Still, experts and officials are examining whether such a scheme is doable. And even if it is, Chen said, crucial elements, from building a trading infrastructure to drawing the limits or "caps" that factories can emit, are largely missing. Thus, it could take years to see the scheme take shape.

Incubating green startups

But Chongqing doesn't want to wait for that long. Although keeping its status as an industrial center, Chongqing is now steering away from energy-intensive cement producers, for instance. Instead, it embraces businesses that can boost economic output while decreasing environmental damage.

Earlier this year, Chang'an, China's fourth-largest car maker, which is based here, opened an environmentally friendly factory to produce zero-emission electric vehicles. And American information technology giant Hewlett-Packard Co. equipped its newly built Chongqing-based production center with energy-efficient machinery to make laptops.

Besides welcoming outside technology giants, the city has also begun to grow its own green startups.

Last year, Tailu Puji, a manufacturer of products that decrease oil use in vehicles, ships and power plants, bought land for its factory at a high-tech industrial park in Chongqing for only half of the market price, according to Liao Zhineng, a company executive.

"That is because the local government cuts land costs for green businesses," Liao explained. "Otherwise, there is no way we could have gotten such a good price. This is really a big help, given nowadays high real estate costs."

Being a green business in Chongqing also creates more opportunities for financial backup. Liao noted that the industrial park his company is located in helps connect green startups with high-profile investors that are otherwise far beyond the company's reach.

While its mass production only started last spring, the company has already sold products to half of the nation, said Liao. "We never imagined growing so fast. It seems clients are quite excited about our fuel-saving technology."